Thursday, May 26, 2011

The Evil in Monthly Subs

Yesterday, in a rather lengthy post, I compared the monthly-subscription business model with the free-to-play business model in MMORPGs. One of the points I mentioned was that developers of f2p games have an incentive to take unfair advantage of their players. Several commenters have pointed out that this also applies to the subscription model.

So, I decided to make two posts about those unfair practices. Let's start with a post about the subscription model.

They want you to forget your sub!
Since developer have an interest in you being subscribed, independently of playing, they try to make it easy for you to forget to cancel the subscription. All sub-based games I know have automatically recurring subscriptions. However, you can usually unsubscribe a second after you resubscribed, and that's what I always do. But most players probably don't.

They bet against you - and win.
The company offers you a discount if you subscribe for more than one month. The reason this makes sense is that players often over-estimate the amount of time they will spend in the game. They are typically enthusiastic when they subscribe and the company tries to take advantage of that.

Currently, a one-month sub with WoW costs 12.99€ (=$18.31) in Germany. Three months cost 38.97€ which is exactly 3x times as much. But a 6-month sub costs only 65.94€. Thus, you save exactly 12€ if you play for 6 months. (Isn't it nice to get a round number?), Anyway, what does this tell us?

Firstly, it tells us that Blizzard doesn't really care about the 3-month sub. It's just there to make you feel smart about discovering that it's useless. Making people feel smart and confident is important if you want to sell them something. Secondly, it makes it easier for you to see that the 6-months sub is rather good. Multiplying something with two is easier than to multiply it with six and 38.97€ times two is obviously more than 70€. Thirdly, by comparing something that makes some sense with something doesn't make any sense at all, that which makes some sense seems to make even more sense.
Finally, it makes the 6-month sub appear less extreme, because you compare it with a three month sub, instead of a one-month sub.

The 6-month sub seems really good. Let's assume 30 days per month. If you go with the 30-day sub you pay 0.433€ per day. At that price, 65.94€ buy you 152 days of access to World of Warcraft. The 6-months sub, however, will buy you 180 days of access to World of Warcraft. You gain 28 days of "free" access. Almost an entire month!

Now, before you celebrate and go for the 6-month sub, let's have a look at it from the company's point of view: Blizzard isn't stupid. If all players who select the 6-month sub actually were willing to resubscribe after 152 days (about 5 months), they would not offer it for a discount! The 6-month sub is a bet: Blizzard bets that you would not be willing to resubscribe after 5 months. If you select this option, you bet that you will.

Just like any insurance company, Blizzard has an advantage here: They have massive amounts of data. On average they profit from the 6-month sub - otherwise they wouldn't offer it!
Of course, you also have a specific advantage: You know yourself better than Blizzard does. So, if you are absolutely certain that you would be willing to resubscribe in about 5 months (152 days), go for the 6-month sub! But then .. how can you be certain? Remember, on average, Blizzard profits from this offer. And do you really know what patches will have come out in 5 months?

Also, consider that your one-month sub might end at a weekday when you have no time to play, anyway. Even if you like to be subscribed continuously, you can save many days by not being subscribed in between the one-month intervalls. Maybe you are on vacation when a one-month sub runs out? That could save you many, many days.

The option to subscribe for six months instead of one, also tells us that a substantial amount of players who select the 6-month option lose the bet and play WoW in chunks of less than 5 months, because for every player that Blizzard loses the bet on, they need one where they win the bet! Otherwise the option weren't profitable.

And, finally, we learn that there really aren't all that many players nowadays that subscribe for 2-4 months in a row. Otherwise, they would try the same trick with the three-month option! This, actually, underlines that WoW nowadays is played by to extremes of players: Those that always have a running sub, and thus choose the 6-month option. And those that just have a look and typically do not play longer than one month in a row!

They get money for you being subscribed, not for you having fun!
In a perfect world, you would pay an equivalent of fun to the company. So, if you had twice as much fun, you'd pay twice as much. Unfortunately, and the companies probably seriously regret it, no such payment model has been developed yet.

The monthly sub model encourages the developers to not maximize your fun at any certain day, but to stretch it. That means that rather than you having a hell of a lot of fun today and not so much tomorrow, they'd rather have you have just enough fun to not unsubscribe for as long as possible. Of course, it is hard to calculate with 'fun'. It is not a zero-sum thing and a single really fun evening with your guild might very well keep you subscribed for weeks and months; it might even make you spread the word of mouth! So, in practice the developers just try to maximize your fun, while also always offering something to do. This is where grinds come in. Honestly, in WoW classical grinds have mostly been removed. The only thing that is left are achievement grinds.

But there are a lot of mechanisms in the game to keep you continuously engaged even if you couldn't care less for achievements. Character power progression is especially good for that. Once you reach maxlvl in WoW, you first need to go to normal dungeons and at the same time grind reputation with daily quests to access important items, then you go to heroic dungeons, then you go raiding normal modes. And if you are crazy you go grind heroic mode raids. I know nobody who does or did that, actually.

Now, some players might argue that WoW would be more fun, if you could progress faster. But, actually, I think, this pressure on the company to stretch the fun is good. It's exactly what is missing in single player games. I'd love to play The Witcher longer, having to explore huge dungeons for many nights - even if they are repetitive. But the game is made in a way that I can and must play it through in 40 hours or less.

Also, Blizzard is really quite crazy when it comes to content. For some reason, they like to make you progress much faster than they can offer content. Watch TotalBiscuit's rage-quit video in the last post to get a taste of that.

The best explanation I can come up with is that the developers are under a constant pressure to keep the sub number rising and, thus, constantly sacrifice the long-term success for the short-term success of the game.

Of course, interpreting a company's actions only goes so far. They aren't completely rational in the end.

Any more evil incentives?
Feel free to comment!


  1. Actually, the 3 and 6 month prices are probably an attempt at price anchoring. This is common in restaurants: Let's say you see 3 bottles of red wine priced at $10, $25, and $50. People will rarely buy the $10 bottle for fear of being seen as cheap. The real purpose of the $50 bottle is to make the $25 bottle seem more reasonable. Same way the "high" price of the 6 month sub makes the 3 month sub look better; Blizzard assumes you'll not be able to do the math and realize you're not saving anything.

    What's interesting is that in the U.S., the 3 month subscription saves you about $1 per month (6 months saves you $2 per month). So, Blizzard is also using regional pricing differences to maximize profits.

    As I said before, if you think that a developer is out to screw you, it doesn't matter if they use a subscription or another business model; they'll screw you as much as they want as often as they want. Only play games and offer payments to companies that don't look too shady...

  2. Well, wait for the list of stuff developers can do in a f2p game, Psychochild. *grin*

    You're right with the price anchoring, by the way. It also plays a role. It is, however, a minor role in this case, because players are encouraged to calculate and thus multiplay the 12.99€ by three and six. Thus, the 12.99€ suddenly is directly connected with a much higher number.

    I thought about asking in the post how they do it in the U.S. thanks. Interesting bit of information. ;)

  3. Actually, upon thinking about it a bit more: It's certainly not price anchoring. Price anchoring works if you have alternative products. Just like in your example.

    It doesn't work if you offer different quantities of the same product. If one bottle of wine costs 10€, three 25€ and six 50€ then this is called a discount.

    If WoW's sub model were about price anchoring, people would be encouraged to buy the 3 month subscribtion. I don't have a high opinion on the mathematics skill of the general population, but I am pretty sure everybody with access to a credit card and willing to spend some $40 or $60 is able and willing to do a multiplication before he spends the money.

    And nobody who does the multiplication will ever buy the three months sub.

  4. Nils wrote:

    Well, wait for the list of stuff developers can do in a f2p game, Psychochild. *grin*

    I have a hard time believing that any business person has ever thought, "You know, I'd really love to screw my customers. But, man, this subscription business model prevents me from doing so!" Sure, you can probably enumerate more ways for an "item shop" business model can be used to screw players, but once again: any business that wants to screw you over is going to be restricted by a business model. The attitude "subs = good, free-to-play = bad" is not only wrong, but dangerous.

    Actually, upon thinking about it a bit more: It's certainly not price anchoring.

    It can be both. Anchoring works by adjusting the way you think about a price. The higher total price for the 6 month bundle makes you think the 3 month price isn't quite so high. Your example of buying multiple bottles of wine is the same: the $50 for 6 bottles makes the $25 for 3 bottles seem more reasonable. (It might also prey on some people's fears that buying too much wine might reflect poorly on them. Buying 6 bottles would be excessive and perhaps a sign of a drinking problem, but buying "only" 3 bottles seems more reasonable... even if you drink them all in one night by yourself!)

    Consider why a business would offer a discount for multi-month. As you point out, they're figuring that you will maybe not play that long but end up paying more than if you had gone month-by-month. They also earn more money based on the "present value" of money (they could invest the additional money you pay now and make a bigger return).

    And nobody who does the multiplication will ever buy the three months sub.

    If you assume people take the time and think about prices, then most of the psychological tricks don't work. I mean, we both know that $5.95 is almost $6. So, why are so many prices five cents lower? Because it's a psychological trick that gets many people to round the price down to $5 instead of up to $6.

    The brutal reality is that a lot of people won't do the multiplication. You'd probably be rather surprised at how popular the 3 month plan actually is; I don't have any data, but I'll bet the percent of people using that plan is significant.

  5. There's an additional point to the longer subscription periods that isn't quite as shady in intention - customer retention.
    If you've already paid for 6 month subscription, you are far less likely to quit the game over momentary frustrations or promises by competitors.
    Offering a discount on longer subscription times might therefore even be a good business move if the company does not expect to make money on people who overestimate the time they are going to keep playing the game. Discounts are customer loyalty programs.

  6. the discount on the 6 month subscription is designed to make people *who wont play that long* buy it, because it looks the cheapest.

    what they're doing is determining their average retention length (check Elder Game for a good discussion of this) and then providing an option *longer* than the average but *cheaper* by the month: a great deal if you KNOW you're going to stay that long; a terrible deal if you think you might but turn out, like the majority of people, to not stay that long. Lifetime deal work in very similar ways - as is clearly seen from the terrible-value Champions Online Lifetime Agreement.

    a good, non-game example: about 12 months ago, my daughter asked my wife and i to buy her a fitness club subscription. we suggested the 3 month plan - thinking, let's see how much she really goes - but she *insisted* on the 2-year plan because 'it had the cheapest monthly cost. she ended up going for... about 3 months. and we'll still be paying in 12 months time. this is standard practice for all subscription-based services, sub-based MMOs as well.

  7. Thanks Scrusi, I missed that one. The sunken-cost fallacy is truly everywhere.

    Seanas, I hope your daughter learned something ;)

  8. *** The euphemistic name
    It's not pay to play, it's pay to grind at the speed they (the company) wants you to play to keep hooked. It's more like "pay for a second job".

    *** First, you need to buy points!
    Because everyone pays the same they have to make the game accessible to as much people as possible. Remember, every warm body pays the monthly fee and is as important as you to keep hooked.

    They need to keep you hooked. And use all kind of tricks like a weekly or daily max on what you can achieve. That forces you to log in every day and guarantees that you stay "addicted". You start to log in out of habit, not because you like to play. Sunken-cost fallacy because you can't loose the daily quests.

    That, of course, destroys immersion like nothing else. If you play because you need to do a dungeon today instead of doing the dungeon when you feel like you should fight a threat.

    *** Just buy once
    You can "easily" get one piece of your tier set by doing some daily heroics but you need a raid for the full set. Raids have a strong binding with the game as you either play regularly or you'll loose your spot. Raids are perfect to keep you hooked.

    Tey have to make sure that the most relevant content can only be completed on a fixed time schedule. They can't risk to give you freedom, otherwise you could unsubscribe for a month.

    *** Limited offer
    They have holiday events spread over the year which doesn't allow you to unsubscribe or you can't finish the long strange trip achievement and won't get the drake. But you've already invested a lot of time into those achievements. Sunken-cost fallacy.

    *** Pride and status
    The more you play the way they want you to play, the more they reward you with things that increase your status. And they want you to stay hooked. That's why the best gear and achievements can only be reached by a raid which requires weekly attendance.

    *** Peer pressure
    Better make sure to be able to raid 2 nights a week or you'll loose your spot and your chance on loot. And don't dare to unsubscribe or you'll loose your spot.

    *** Advertisement
    You get advertisement from gold sellers...

    *** Compulsion rocks
    You thought that you've payed to play but then this other server is where you apply to a guild. And they play the other faction. Time to shell out some extra cash.

    Which is also your first purchase and makes it easier for them to sell you a pony.

    *** Controversial items
    Just add controversial patches. Every class will get their turn to be the FOTM class. Not really good for the game but it evokes strong emotions and keeps you hooked.

    *** You already spent so much.
    You've already spent so much time, might as well do the daily today again to max out cooking recipes or VP for a set item. You play although you're burned out. They have to keep you hooked. Sunken-cost fallacy.

    *** Price anchoring
    They sell an expansion every so often. That makes the monthly sub look smaller because the monthly 13 Euro are less then the 40 Euro you've payed for the expansion.

    *** Collecting stuff
    Players love sets. So, yes, the head and shoulder always drop of the last boss or require the highest rating. That means you have to keep paying for a long time to reach those. And you require a raid which requires weekly attendance which keeps you hooked.

    *** Limits on how much you can spend
    So... yes... I think I look at the WoW parental control with different eyes now... Limit your playtime to ensure that you will play when you're allowed?

    Plus you've payed for the month, might as well play for your money to not loose the subscription. Sunken-cost fallacy.

    *** Hallucinating
    Just stay subscribed we'll add a new legendary with 4.2 with it's own quest and lore. You can't miss that.

    Of course, you will never get it, but keep hallucinating!

  9. Last time I checked, which was 2005 when I've created my account, it was the same in Europe. 1 Euro saved per month for 3 month and 2 Euro saved per month for 6 month subscription.

    I never checked again as I couldn't care less if it's 13 Euro or a bit less.

    > Seanas, I hope your daughter learned something ;)

    Actually, he's the one who had to learn something. :-p

  10. Hehe, nice, Kring. ;)

    Now, what you mostly did there was to exchange money with time. Because, obviously, time is money for a monthly sub game. And they try to use tricks to get you subbed longer and with fewer breaks.

    Two points
    1) Your analogy doesn't work perfectly for every point, as you have certainly realized yourself.

    2) I prefer a time-scam to a money-scam every time. If only for the reason that there are a lot of things that keep me from 'paying' 14 hours a day, but few things that keep me from paying 100€ on one single day.

    And, I actually like it if developers add stuff that requires time. I'd prefer huge dungeons in The Witcher or Dragon Age, all I get are tiny caves.

  11. I think there are 3 different topics.

    1) The way the company earns money
    2) The way the company spends money on your game
    3) The impact of the way the company earns money on your game.

    Unfortunately you've talked mainly about 1) which I find the least interesting. Topic 2) and 3) are more important. I'm still hoping you'll talk more about point 2 and 3 in a later post. :)

    For 1) there are 3 possible ways. Monthly fee, item store and content store. I don't like the item store concept. I've played Magic: The Gathering and spent way to much money on those stupid cards until WoW "got me dry". I doubt you'll ever see me in an item store game because I would be one of those poor souls paying for "your" content...

    I think I would like the concept of the content store. You buy the basic game and get a lifetime F2P account. And then the company sells a new dungeon every month for 13 Euro or something. That would ensure them a constant income and you a constant stream of new content. Lots of possible problems but it sounds like the most fair solution - which means it'll never be implemented. :)

    Point 2) is much more important. It's not so important how the company gets their money as long as they spend it on the game and don't use it as profit. Making a lot of money only gets "evil" if it's only for the profit of the stake holder and managers.

    So, we should look at the influence of the different payment models on how much content we get and of which quality.

    Point 3) is where I really have a problem with WoW. Vanilla, and in some way early TBC, was designed to keep you playing. It was a lovely game and you played because you wanted to play. And that kept you paying.

    With late TBC the game changed. They've started to focus on keeping you paying which got worse in WotLK and just completely fucked up in Cataclysm.

    The concept of daily quests, and all the other "daily" and "weekly" stuff, is just fubar:
    - It is not immersive. Why exactly do you like me more for killing those orcs tomorrow but you won't care when I kill them today?
    - It is annoying - why can't I fucking grind for 10 hours on a day off?
    - It is even more annoying - why do I have to login at 11 o'clock p.m. after a trip to the cinema to do the JC daily to not miss a token which I'll never be able to recover?
    - The daily lookout of heroic dungeons is the same crap. Why can't I grind my item today and go to the cinema tomorrow?

    They've added a lot of things to the holiday events. You have to play the whole year to complete your pet collection. And even more, you had to be available during specific weeks, most likely for 24 hours! There were people which logged in every hour for "Trick or Treat" the whole night. They've set up an alarm clock. For 2011 such a design is just crazy.

    They've flattened the endgame. That has a lot of advantages but it also means that you have to experience the content on Blizzards speed. The T11 content will be gone with 4.2 and be replaced with a 20% weaker version. Although I think that this change is good it also puts a lot more pressure on playing everything at the right time, which is defined by Blizzard. That breaks immersion for me.

  12. "And, I actually like it if developers add stuff that requires time. I'd prefer huge dungeons in The Witcher or Dragon Age, all I get are tiny caves."

    Sounds to me like a preference for more content, not more time-wasting. There's a difference.

  13. > And, I actually like it if developers add stuff
    > that requires time. I'd prefer huge dungeons in
    > The Witcher or Dragon Age, all I get are tiny caves.

    So, yes, I love a good grind. (Sons of Hodir was not a grind, that was a free enchant.) I love to waste insane amounts of real life time in a game. But I hate it when it clashes with my real life schedule, and a lot of the "improvements" of late TBC, WotLK and Cata were specifically designed to reduce your flexibility when you play.

    I love to spend a lot of time in the WORLD of warcraft.
    I hate to leave work early to be able to get something to eat to be able to raid.

    I'm lucky enough to have flexible work time. The least I expect from a game is to give me flexible gaming time. And raiding content can't do that.

    > 2) I prefer a time-scam to a money-scam every time.
    > If only for the reason that there are a lot of things
    > that keep me from 'paying' 14 hours a day, but few
    > things that keep me from paying 100 Euro on one single day.

    Then again, wasting 14 hour a day doesn't sound attractive nor does wasting 100 Euro per month.

  14. Kring,

    there's no question that Blizzard tried to use the Sunken-Cost Fallacy to make you not want to 'lose' a single daily quest/dungeon. But they overexaggerated. People burned out after a few weeks of doing daily dungeons in Cataclysm. Thus, they now have weeky dungeons.

    Anyway, morally this is not one bit better than a sunken-cost fallacy scam that tries to access your wallet. It's just that I really prefer to find out that I wasted my last two week's free time trying to do every daily dungeon, to finding out that during the last two weeks I spent 400€ on crap.
    The reason probably is that the time would now be past anyway, but the money would still be there and could be spent on more sensible things.

    On your point (2). I agree, but the only thing that can make companies spend money on the game is competition. I can't think of much else, honestly. We slowly get there, fortunately.

    Point (3) is my main point, it's just hard to argue, because people just have genuine and legitimate different opinions. I think to buy a flaming sword destroys immersion; Psychochild or Tobold, for example, don't see a problem. This is not about logic, but about feelings.

    More than once I have been in the cinema with friends and when we came out they said: "Great movie." And I said: "I was so busy suspending disbelieve that I missed the story."

    Now, you know that I agree with the WotLK/Cata bashing in spirit, so I won't need to repeat that. ;)


    in some way I want more content, but this content I want is actually pretty cheap. To make one of the dungeons in The Witcher twice as big wouldn't really cost much. I don't want new graphics or monsters or mechanics or anything like that. MMORPGs do this just to keep you playing, and, ironically, it turns out that I actually like that. I usually prefer a big world to a small one, even if the big one is not as polished.